Trump's latest move to anger the tech community: eliminate the 'startup visa'

On July 17, 2017, entrepreneurs and venture capitalists were planning to celebrate.

While the Barack Obama administration was unable to get much immigration reform through Congress, the Department of Homeland Security had approved a program right before the 44th President left the office. The International Entrepreneur Rule, referred to many in Silicon Valley as the "startup visa," would have provided a way for foreign entrepreneurs to come to the United States and build their businesses.

It seemed on some level like a no brainer. Offering visas to the best and brightest people with the drive to start businesses would mean jobs and continued innovation. And with growing competition from startups in other part of the world, the program would help the U.S. maintain its leadership role in the fields of technology and innovation.

It was set to go into effect next week. But earlier this month, the Trump administration delayed the approval, the San Francisco Chronicle first reported, and it continues to work on ways to make it harder for people outside the United States to come here—no matter if the reason is to create jobs and capital.

The delay and potential block has left Silicon Valley frustrated with the administration... again. It's just the most recent in a series of decisions that have left the tech community, which has pushed back against Trump's travel ban, upheaval of the H1B visa program, and the Paris climate agreement.

"We really need a true startup visa," said Andrew Schwab, founder and managing partner of 5AM Ventures. "This rule gave entrepreneurs that have raised money some validation for sure, giving them a chance to run and start a company. To me, it was a very practical first step" in more comprehensive immigration reform.

Schwab, as an investor in many biotech companies, said his sector, in particular, sees a need for a "true startup visa." Founders in that industry, he said, often start their companies directly after attending American universities, where they studied in the sciences. While they once had a student visa, that doesn't transfer over if they leave the university laboratory and start a business.

Without an easy way to access a visa, these founders, who were educated in the U.S. and perhaps financially funded by the U.S. government, could be unable to stay in the states and therefore be forced to move abroad.

"If you're talking about biotech, we're talking about a company that will raise capital and could cure cancer. Don't we want those people to stay here?" Schwab said.

Apparently not. The current administration appears to be dedicated to destroying visa programs that the tech industry relies on.

"When I hear they want to tighten immigration rules, I'm literally shaken because I'm like what does that mean?" said Jean-Francois “Jeff” Clavier, founder and managing partner of SoftTech VC. "I have a couple dozen of international founders, and I need to have their visas renewed."

Clavier himself is an immigrant. He had moved from France 17 years ago, and 17 years later he has funded roughly 200 companies in the United States. Those companies have in turn helped create tens of thousands of jobs, he estimated.

"There are scores of examples like that where immigrant founders make a difference and create millions of jobs in the U.S.," Clavier said. "It's not like a founder is going to steal jobs and then create an enclave of foreign jobs."

So what's a founder to do? For now, there are other visa options in the United States. But there's also a question of incentives. Canada and France, for example, are both building funds and expanding their visa programs to support entrepreneurship.

America's loss, in this case, is a gain for other countries.

"I would say good news for founders is there are plenty of other venues for them to build their companies. The new French president is opening the doors, 'We'll give you visas. We'll give you cash,'" Clavier said.

Silicon Valley isn't done fighting. Schwab and Clavier are both board members at the National Venture Capital Association, which has lobbied with lawmakers in Washington D.C. in support of programs like the International Entrepreneur Rule. NVCA spokesperson Ben Veghte said they will be actively engaging in conversations during this delay, where there is an open comment period.

No tech company, including Salesforce, Microsoft, Uber, Lyft, Twitter and Snap, reached out to for the story was willing to comment. Facebook directed us to FWD.us, a lobbying group focused on immigration group and led by Facebook CEO Mark Zuckerberg.

"We are extremely disappointed that—after 2.5 years of public and private sector input—the White House has decided to roll back the International Entrepreneur Rule, which was a critical effort to ensure that the best and the brightest foreign-born entrepreneurs could more easily grow the companies that will create American jobs here in the U.S. while expanding our economy," FWD.us President Todd Schulte said in a statement.

"This is unquestionably a setback for the United States in the global race for talent - we should be encouraging innovators to bring their new ideas, expertise, and unique skills to our country, rather than incentivizing them to put their talents to work for our competitors abroad," the statement continued.

Immigration is just one part of the effort to support entrepreneurship in the United States. Schwab pointed to tax credits and to venture capital funding.

"We're not doing anything other than resting on our laurels," Schwab said.